Nine automatic enrolment responsibilities for employers. Knowing all your duties and responsibilities as an employer is key to staging.

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1 Nine automatic enrolment responsibilities for employers Knowing all your duties and responsibilities as an employer is key to staging.

2 About IRIS With 30 years' experience, IRIS provides business critical software and services to the UK SME sector and accountants in practice. Over 53,500 small and medium-sized companies including 15,500 accountancy practices rely on IRIS every day to run their business and collaborate, with around 82,000 endusers subscribing to IRIS cloud solutions. IRIS Software Group is the number one solution provider for RTI and its software pays 14 percent of UK businesses that operate under PAYE. All customers receive the greatest choice of RTI payroll software and services managed under the brands IRIS and Earnie. IRIS has developed a complete solution to help businesses prepare for automatic enrolment. This includes compliant payroll software, the IRIS Automatic Enrolment Module to handle your employee assessment, IRIS OpenEnrol to handle your communications, pension output files, training courses, free guides and more. Call: earniesales@iris.co.uk Visit us: iris.co.uk/autoenrolment Legal information This information doesn t constitute financial, investment or professional advice and shouldn t be relied on as such. IRIS do not make any personal recommendation or give advice to employers and their workers on how to make investment decisions. If you are seeking this kind of advice we would suggest speaking with a qualified financial adviser.

3 What is automatic enrolment? Automatic enrolment is the mechanism behind the government s Workplace Pension Reform (WPR). This states that workers need to be automatically enrolled on a nominated pension scheme, when they meet certain criteria. Why is it being introduced? People are living longer, with healthier lifestyles; as a result the ratio between the workforce and those at a pensionable age is decreasing. People are also planning and saving less for their retirement. The current state pension cannot sustain this change so as a result, workers are being encouraged to save for their retirement through workplace pension schemes. Leading industry experts suggest you should start preparing for auto enrolment 12 months before your staging date, so you should already be thinking about the next steps you need to take! In 1901 there were 10 workers for every 1 pensioner. In 2010 this had dropped to 3 workers to every pensioner. By 2050 it is estimated to have dropped to just 2 workers to every pensioner.

4 Nine Employer Responsibilities 1) Know your staging date Staging date is based on the PAYE data provided to The Pensions Regulator (TPR) by HMRC on 1st April 2012 employers will then be contacted by TPR months before their staging date and then again 3 months before their staging date. 2) Define your automatic enrolment plan How will your company prepare? Leading industry experts advise beginning this process 12 months before your staging date. 3) Choose how your automatic enrolment process will be managed What type of solution will you choose? Manual? Middleware? Payroll or HR system compatible? 4) Assess your workforce for eligibility You will need to do this every pay period after you ve staged.

5 Nine Employer Responsibilities [cont d] 5) Review your current pension arrangements Does your current pension qualify? Don t assume it does. 6) Communicate the changes to all your workers IRIS OpenEnrol can help you communicate these changes smoothly to your workforce with s and letters. 7) Automatically enrol your eligible jobholders Employees must be automatically enrolled on a scheme when they fit the eligible criteria. This must be assessed and reassessed every pay period for eligibility changes in your workforce. 8) Register with The Pensions Regulator and maintain records Records must be maintained for 6 years. 9) Contribute to your workers pensions The minimum contributions are being phased in from 2% from October 2012 growing to 8% from October Automatic enrolment penalties The Pensions Regulator can issue penalty notices to companies who aren t compliant. The penalties are as follows: Fixed Penalty: 400 Escalating Penalties: Daily fines of 50 up to 10,000 Civil Penalties: 5,000 for individuals and up to 50,000 for organisations

6 What are your next steps? Get your free automatic enrolment health check Call the IRIS team for a free assessment today. Do your research There is plenty of free guides, articles and information available. Visit the IRIS insight pages and blog to keep up to date with all the latest information. Book your place on auto enrolment training There are great courses that can help you better understand this complex legislation as well as courses that help you understand the changes in your payroll system. Speak to a member of the IRIS auto enrolment team to find out more. Find out how software can help make your job easier There are many ways to carry out your auto enrolment assessments and pension communications. Speak to an IRIS team member today to find out more.

7 Auto enrolment: Simple vs Complex There are many ways you can choose to process automatic enrolment requirements for your company. The IRIS AE Suite Below are the 3 elements that complete the IRIS AE Suite 1. IRIS Automatic Enrolment Assessment Module This solution integrates with your payroll software to make assessing your employees easy and generate your pension information to send to your provider. 2. IRIS OpenEnrol Communicating these complex changes to your employees is a legal requirement. IRIS OpenEnrol takes the information from your assessment and sends it to your workforce at the click of a button. 3. IRIS OpenPayslips Included in the IRIS AE Suite, is IRIS OpenPayslips which allows you to send payslips direct to your employees address with the same simplicity of IRIS OpenEnrol. For more information call:

8 Key terms and definitions Automatic Enrolment (AE) The process in which Eligible Jobholders, who are not already a member of a qualifying scheme, must be automatically enrolled into a qualifying pension scheme. Department for Work & Pensions (DWP) Policy owner and responsible for enabling and coordinating activity for the programme. Defines the communication required between employers and employees. NEST (National Employment Savings Trust Corporation) A pension provider available to all employers who want to use it. NEST is a workplace pension scheme designed for automatic enrolment that is available to any UK employer regardless of the organisations size. Opt In A jobholder has the right to Opt In to an automatic enrolment scheme, unless they are: An active member of a qualifying scheme with that employer. An eligible jobholder for whom the employer has an automatic enrolment duty. Opt Out Eligible jobholders may choose to Opt Out after they have been automatically enrolled. Non-eligible jobholders who have opted in may choose to Opt Out after they have been enrolled. Workers who have been enrolled under contractual enrolment and entitled workers who have asked to join a scheme do not have the right to choose to Opt Out. If they want to leave the scheme, they must cease membership in accordance with the scheme rules. Eligible jobholder Aged between 22 and the state pension age (SPA) Working in the UK Earning above the minimum earning threshold (currently 8,105) Non-eligible jobholder Aged between 16 and 21 or SPA and 74 Working in the UK Earning above the minimum earning threshold OR Aged between 16 and 74 Working in the UK Earning above the lower earnings threshold (currently 5,564) but below the minimum earning threshold

9 Key terms and definitions Entitled workers Aged Working in the UK Earning below the lower earnings threshold ORIGO An ecommerce standards and services body for the UK financial services industry. Represents several pension providers. Postponement Date Postponement allows the employer to postpone the automatic enrolment process for up to 3 months. This can be for: All employees (can only be postponed at staging date) Selected individuals (can be postponed at staging date or when they trigger automatic enrolment) Groups of employees e.g. new starters (can be postponed at staging date or when they trigger automatic enrolment) Qualifying Earnings The earnings used to identify whether an employee is an eligible jobholder or a non-eligible jobholder and their level of contributions. When a worker is paid in arrears, the employer considers what is due to be paid in this period regardless of what period it is earned. Includes: salary, wages, commission, bonuses, overtime, SSP, SMP, OSPP, ASPP, SAP. Staging Date The date when businesses must start the automatic enrolment process The Pensions Regulator (TPR) The UK regulator of work-based pension schemes. Responsible for auditing companies ensuring that employers are compliant with the WPR legislation The Pensions Advisory Service An independent non-profit organisation that provides free information and guidance on the whole spectrum of company, personal and stakeholder schemes.

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